Posted on: 08th Apr, 2010 01:39 pm
good afternoon,
i am currently in a rough situation with our current home. i bought in late 2005 - when the market was booming. it was my first experience with this process and as an uneducated novice, i was given the worst possible type of loan. over the years, the payments increased each jan. 1 and all that was happening was the principal amount increasing each month.
i have been unable to make a payment since november 09. i applied multiple times for a loan modification, for which i was denied for making too much money (which had to have been some kind of joke). the house is currently on the market for a short sale and that is going nowhere.
i am scared about everything now as my credit was wonderful before this began. the whole thing makes me so nervous it is miraculous when i can even pick up the phone to ask for help. i cannot refinance as the value is now far below the loan balance (tried that years ago to no avail) and at this point will be moving soon anyway. the lender seems to have no idea what they are doing and have not been helpful at all.
what is the best option for me? i have not yet received notice of foreclosure but i can't imagine that taking much longer. i have an 80/20 - both with the same lender. now in the 5th month of delinquency with no suitable options to save my credit. i just want out, without facing a huge tax penalty (money i don't have) and without being sued! please help!
i am currently in a rough situation with our current home. i bought in late 2005 - when the market was booming. it was my first experience with this process and as an uneducated novice, i was given the worst possible type of loan. over the years, the payments increased each jan. 1 and all that was happening was the principal amount increasing each month.
i have been unable to make a payment since november 09. i applied multiple times for a loan modification, for which i was denied for making too much money (which had to have been some kind of joke). the house is currently on the market for a short sale and that is going nowhere.
i am scared about everything now as my credit was wonderful before this began. the whole thing makes me so nervous it is miraculous when i can even pick up the phone to ask for help. i cannot refinance as the value is now far below the loan balance (tried that years ago to no avail) and at this point will be moving soon anyway. the lender seems to have no idea what they are doing and have not been helpful at all.
what is the best option for me? i have not yet received notice of foreclosure but i can't imagine that taking much longer. i have an 80/20 - both with the same lender. now in the 5th month of delinquency with no suitable options to save my credit. i just want out, without facing a huge tax penalty (money i don't have) and without being sued! please help!
Hi jayelbee!
Welcome to forums!
Short sale is a good option to get rid of the property. It will have a less negative affect on your credit score than a foreclosure. A short sale will reduce your score by 80-100 points whereas a foreclosure will reduce your score by 250 points. Also, in case of short sale and foreclosure, you would be liable for paying the balance amount resulting from the sale.
I would suggest you to contact your lender and apply for a deed in lieu of foreclosure. Though your credit will be badly hurt as it would get reduced by 250 points, you won't be responsible for the deficient balance. It will be forgiven by the lender. Though it will be considered as your income by the IRS, you won't have to pay the taxes depending upon the Mortgage Debt Relief Act.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Short sale is a good option to get rid of the property. It will have a less negative affect on your credit score than a foreclosure. A short sale will reduce your score by 80-100 points whereas a foreclosure will reduce your score by 250 points. Also, in case of short sale and foreclosure, you would be liable for paying the balance amount resulting from the sale.
I would suggest you to contact your lender and apply for a deed in lieu of foreclosure. Though your credit will be badly hurt as it would get reduced by 250 points, you won't be responsible for the deficient balance. It will be forgiven by the lender. Though it will be considered as your income by the IRS, you won't have to pay the taxes depending upon the Mortgage Debt Relief Act.
Feel free to ask if you've further queries.
Sussane